Wall St. drops as biotechs, semis sink Nasdaq

Today the powers-that-be decided that stocks were as high as they are going to be for a while and this triggered a massive selloff as everyone took their profits.  There remains some consternation that the strong dollar will lead to weak Q1 reports so some of the selling is in anticipation of that bad news.  However, only some of it since the harsh winter has already  been factored into the forecasts so if there's any good news at all from Q1, everything will be going right back up again, just as it has for the past several quarters.  Also today the dollar weakened again which should have been good news for the Q1 skeptics so my guess is that the selloff today, which was to the tune of almost 300 points, was more about profit-taking than anything else.  Volume was very active at 7 billion shares.

Wall St. drops as biotechs, semis sink Nasdaq

BY CHUCK MIKOLAJCZAK

DJ:     17,718.54  -292.60     NAS:  4,876.52  -118.21      S&P:   2,061.05  -30.45

NEW YORK Wed Mar 25, 2015 6:56pm EDT

(Reuters) - U.S. stocks dropped on Wednesday as a slump in technology and biotechs sent the Nasdaq to its biggest decline in nearly a year while the S&P 500 fell through key support levels.

Semiconductors and biotech stocks weighed heavily on the Nasdaq, suffering their third straight session of declines after strong gains in the prior week.

An index of biotechnology shares .NBI was down 4.1 percent for the session, its biggest fall since Dec. 23. The index finished below its 14-day average for the first time since Feb. 11 and its 50-day moving average for the first time since Oct. 17.

The PHLX semiconductor index .SOX slumped 4.6 percent for its biggest percentage decline since Oct. 10 and also ended the session below both its 14-day and 50-day moving averages.

"Brutal day in the markets," said Peter Kenney, chief market strategist at Clearpool Group in New York. "Recent leadership represented the best opportunity to manage risk, meaning ring the register, and that certainly was an important driver of the kind of action we saw today."

Losses on the S&P 500 accelerated around mid-session after the benchmark dropped below a support level near 2,085, and late selling pressure pushed the benchmark index below its 50-day moving average at around 2,067.

An earlier government report showing a drop in durable goods orders pushed the dollar index lower .DXY, giving initial support to equities as it eased fears that the rally in the U.S. currency would hurt corporate earnings. However, with valuations stretched as stock indexes trade near record highs, strong data is needed to justify valuations.

The Dow Jones industrial average .DJI fell 292.6 points, or 1.62 percent, to 17,718.54, the S&P 500 .SPX lost 30.45 points, or 1.46 percent, to 2,061.05 and the Nasdaq Composite.IXIC dropped 118.21 points, or 2.37 percent, to 4,876.52.

Kraft Foods (KRFT.O) surged 35.6 percent to $83.17 after a merger agreement with ketchup maker H.J. Heinz Co, owned by 3G Capital and Berkshire Hathaway (BRKb.N). Berkshire Class B shares slipped 0.5 percent to $143.56.

Kofax Ltd (KFX.O) rallied 46 percent to $10.95 after Lexmark International (LXK.N), known for its printers, said it would buy Kofax in a deal of about $1 billion that would double the size of its enterprise software business. Lexmark shares climbed 6.1 percent to $43.27.

After the closing bell, Red Hat (RHT.N) shares gained 4.6 percent to $71.61 as the world's largest commercial distributor of the Linux operating system posted quarterly results and authorized a $500 million share buyback plan.

Volume was active, with about 7 billion shares traded on U.S. exchanges, slightly above the 6.75 billion average so far this month, according to BATS Global Markets.

Declining issues outnumbered advancing ones on the NYSE by 2,240 to 803, for a 2.79-to-1 ratio; on the Nasdaq, 2,242 issues fell and 509 advanced, for a 4.40-to-1 ratio.

The S&P 500 posted 11 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 62 new highs and 33 new lows.